09 April 2012

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Know about NPCI Indian Rupay alternative to Visa, MasterCard and American Express.

Know about NPCI Indian Rupay alternative to Visa, MasterCard and American Express.

National Payments Corporation of India (NPCI) was incorporated in December 2008 and the Certificate of Commencement of Business was issued in April 2009.

It has been incorporated as a Section 25 company under Companies Act and is aimed to operate for the benefit of all the member banks and their customers.
The authorized capital has been pegged at Rs 300 Crore and paid up capital is Rs 60 Crore so that the company can create infrastructure of large dimension and operate on high volume resulting payment services at fraction of the present cost structure.

Presently, there are ten core promoter banks
( State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC).
The Board constitutes of Shri N. R. Narayana Murthy, Chairman, Infosys Technologies Ltd as the Chairman, Nominee from Reserve Bank of India, Nominees from ten core promoter banks and Shri A.P.Hota, Managing Director and Chief Executive Officer, NPCI.

NPCI has deputed its officials to IDRBT Hyderabad and NPCI has taken over NFS operations from December 14, 2009.

NPCI would function as a hub in all electronic retail payment systems which is ever growing in terms of varieties of products, delivery channels, number of service providers and diverse Technology solutions.

NPCI has a mandate to create a domestic card scheme.
The Brand name finalized for the same is RuPay.
This scheme would be similar to domestic card schemes one of which is China Union Pay in China. China Union Pay (CUP) was a national agenda for a few years by mandating all domestic transactions to be routed through the national card system.

Now China Union Pay cards are accepted in 26 countries. The card base is 1.8 billion. Bulk of the payments are made in China by CUP cards.
Although it may not be possible to mandate such transaction flow in India, a domestic card is not a distant dream if all banks work in a co-operative framework. NPCI can reach the scale of China Union Pay by excelling in service quality and by placing the next generation products and services.

Vocalink in UK provides another benchmark for NPCI. Vocalink facilitates money transfer from any bank account to any other bank account in UK on a real time 24 x 7 basis.
This implies that the experience of RTGS has been extended to retail payment segment.
Now that more than 60,000 bank branches in the country are covered under Core Banking Solution, this is very much a feasible proposition in India and would be known as India MoneyLine.

NPCI would also benchmark against Bankserv in South Africa and KFTC in South Korea in terms of operational efficiency, reach across the country and range of products and services.

RuPay is a domestic payment gateway akin to global networks such as Visa and MasterCard’s.

Currently, Indian banks pay 200-300 Crore to Visa and MasterCard for processing debit and credit cards.
This cost is expected to come down after the launch of RuPay card system, which is likely to charge a lower processing fee.
The benefit of a lower fee will be reaped by customers as well to whom the banks pass on the cost.

The RuPay system will also lower the cost of transactions for shops that are reluctant to use the electronic mode of payment on which they currently lose 1.5% of their margin.

More about Rupay
March 26, 2012:
India’s own domestic card payment network was
inaugurated by Shri G. Padmanabhan, Executive Director, Reserve Bank of India.
Envisaged by Reserve Bank of India way back in 2005 as a part of Payment
System Vision Document 2005-08, the new card scheme will offer another option to banks in India to provide debit card services to their customers. The Debit card launched today will be accepted at all 91,000 + ATMs and over 6 lakh Point of Sale terminals in the country. In due course, it would be accepted on internet and also at ATMs/ POS terminals abroad. NPCI has finalized the arrangement with DISCOVER for international acceptance
Banks initially offering RuPay Debit cards to their customers are Bank of India and Union Bank of India. In the initial phase banks accepting RuPay Debit cards on their POS terminals are Axis Bank, Bank of Baroda, Corporation Bank and State Bank of India.

NPCI has already launched Aadhaar based Financial inclusion payment cards in association with Unique Identification Authority of India (UIDAI).

The fee under RuPay scheme is also transparent and not subject to one-on- one negotiation with member banks. Banks will pay only three to four types of fees unlike multiple types of fees under other International schemes.

RuPay scheme will be primarily for debit and pre-paid cards.

Significance of RuPay logo –

The RuPay visual identity is modern and dynamic. The color blue stands for the feeling of tranquility which is the people must get while owning „RuPay‟ brand. The bold and unique typeface grants solidity symbolizing stability.

The orange and green, in fast forward sign, indicate a nation on move and service matching the
pace. The colors orange, green and white, which also symbolize the Indian flag, connote
RuPay‟s proud Indian identity. The name RuPay is derived from the words „Rupee‟ and „Payment‟. Since “RuPay” is also the name of the Indian currency in Hindi, the word is expected to strike an immediate chord with the nation’s populace.

RuPay logo is already there on most of the ATMs in the country. It is only a matter of time that it would be seen at all Point of Sale (POS) Terminals and on-line merchant sites.

China already has its domestic payment network Union Pay, a benchmark against which RuPay may be compared. Union Pay has 200 member banks, including 30 outside China, and is accepted in 104 countries.

Total bank consumer transactions in India is less than 5%

In the first stage, NPCI has launched the RuPay debit card.

The RuPay ATM card allows customers of rural banks and small cooperatives to access a wider ATM network.

Because of security fears, I doubt Indians will start to use Rupay,

Rupay will have to depend and get the latest security technology from the visa , master card and American express.

In India letter send to PMO regarding corruption and request to hide name is not safe, it comes into public domain immediately.

But its good start.

Reality views by sm –

Monday, April 09, 2012

Tags – NCPI Rupay


ra April 09, 2012  

i wonder what financial benefit will customer get out of RuPay !!!

SM April 09, 2012  

@rahul aggarwal

thanks. Banks will save money and little bit benefit will be reaped by customers also.

Arturo April 09, 2012  

Thank you man interesting blog you have!

cookingvarieties April 09, 2012  

hi sm.. having the RuPay is a very encouraging move especially when the government is involved- it becomes a safer and popular mode of financial/ trading transaction.

R April 09, 2012  

Very interesting and informational post, thanks!
Nice blog.

Baur April 10, 2012  

Great news, hope you had a great weekend!

Anonymous,  April 10, 2012  

Indeed post about rupay and npci

npci also implemented interbank mobile banking system, which is running successfully. i already done a post about imps on my blog

thanks for sharing these info

Kewal Joshi April 10, 2012  

nice post. Thanks for the great information.it is beneficial to all.

Teamgsquare April 10, 2012  

Nice information .....

Bvi Company Formation June 13, 2012  

To enable business operators to obtain their Business Registration Certificates early and to ensure that changes in business particulars are updated to the Business Register as soon as possible.